Obama EEOC loses hypocritical lawsuit against company over background checks

“In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.” So began a 3-to-0 ruling Wednesday by the Sixth Circuit Court of Appeals, rejecting the Obama administration’s lawsuit against a company, in EEOC v. Kaplan Higher Education Corp. (Apr. 9, 2014). My employer, the Competitive Enterprise Institute, joined an amicus brief urging dismissal of the lawsuit, which was brought by the EEOC, a federal civil-rights agency. (EEOC stands for Equal Employment Opportunity Commission. Obama has appointed anti-business radicals to the EEOC. )

As former assistant attorney general Roger Clegg (now at the Center for Equal Opportunity) notes,

The Obama Administration sued Kaplan for running credit checks on employee applicants – similar, by the way, to the ones the EEOC itself uses. Kaplan had learned that some of its employees had misappropriated student payments and, to provide safeguards against this behavior, it began screening its applicants for major red flags in their credit history. The EEOC sued Kaplan, arguing that it cannot use credit checks, because use of credit checks has a disparate impact on black applicants.

Anyway, putting aside the inherent dubiousness of the whole lawsuit, there were also severe methodological problems with the Obama Administration’s evidence, which relied on “race raters” to determine, by scrutinizing driver’s license photos, the race of the applicants. So the trial judge threw out the case. Today, I’m happy to report, the court of appeals affirmed that decision – and in no uncertain terms, I might add, much I’m sure to the Obama administration’s chagrin.

(The EEOC has repeatedly been sanctioned by judges for bringing baseless lawsuits, sanctions the EEOC pays using your tax dollars. In 2012, the Supreme Court unanimously rejected the EEOC’s position that it could restrict many hiring decisions by churches and religious entities. The EEOC has also repeatedly been sued by its own employees for violating their rights.)

At the Washington Post, UCLA Law Professor Eugene Volokh provides these excerpts from the appeals court’s ruling rejecting the EEOC’s challenge to the company’s use of background checks:

The EEOC’s personnel handbook recites that “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.” Because of that concern, the EEOC runs credit checks on applicants for 84 of the agency’s 97 positions. The defendants (collectively, “Kaplan”) have the same concern; and thus Kaplan runs credit checks on applicants for positions that provide access to students’ financial-loan information, among other positions. For that practice, the EEOC sued Kaplan. Specifically, the EEOC alleges that Kaplan’s use of credit checks causes it to screen out more African-American applicants than white applicants, creating a disparate impact in violation of Title VII of the federal Civil Rights Act

. . . Proof of disparate impact is usually statistical proof in the form of expert testimony; and here the EEOC relied solely on statistical data compiled by Kevin Murphy, who holds a doctorate in industrial and organizational psychology. For two reasons, however, the district court excluded Murphy’s testimony on grounds that it was unreliable. First, the EEOC presented “no evidence” that Murphy’s methodology satisfied any of the factors that courts typically consider in determining reliability under Federal Rule of Evidence 702; and second, as Murphy himself admitted, his sample was not representative of Kaplan’s applicant pool as a whole. The district court therefore granted summary judgment to Kaplan. The EEOC now argues that the district court “erred” — a telling, oft-repeated, and mistaken choice of word here — when it excluded Murphy’s testimony. We reject the EEOC’s arguments and affirm. . .

The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding Murphy’s testimony.

In a different court case in Maryland, a federal judge dismissed an EEOC lawsuit against employer over its use of background checks after concluding that the EEOC’s “expert” witness engaged in an “egregious example of scientific dishonesty.”

The EEOC has had its own labor troubles, committing systemic violations of federal labor and employment laws. As law professor Jonathan Adler has noted, “The Equal Employment Opportunity Commission, responsible for ensuring that the nation’s workers are treated fairly, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has ruled.”

The EEOC has a much worse record of labor and civil-rights violations than most corporations and agencies with a similar-size workforce.

The EEOC was found guilty of systematic, illegal, reverse discrimination (discrimination against white males) in Jurgens v. Thomas, 29 Fair Empl. Prac. Cas. (BNA) 1561, 1982 WL 409 (N.D.Tex.1982). When he was head of the EEOC, Clarence Thomas tried but apparently failed to end the reverse discrimination committed by many of his underlings at the agency.

The EEOC also has had a lot of sexual harassment lawsuits against it (and I am talking about real sexual harassment, not weak claims based on a couple of off-color jokes, the sort of trivial thing the EEOC itself might unsuccessfully sue a private employer over).See, e.g., Spain v. Gallegos, 26 F.3d 439 (3rd Cir.1994).

In short, the EEOC is like “the fox guarding the henhouse,” noted reporter John Berlau in a 1997 news story (See “Discrimination at the Opportunity Commission,” Insight, May 19, 1997).

The EEOC continued to discriminate against white male employees, including those white males, like attorney Joseph Ray Terry, that it sent to defend affirmative action in court. See, e.g., Terry v. Gallegos, 926 F.Supp. 679 (W.D. Tenn. 1996) (court ruled that agency discriminated against attorney Joseph Ray Terry, who has long argued in court on behalf of affirmative action for the EEOC).

The EEOC also makes it more difficult and costly for employers to hire, thus wiping out jobs.

Restricting background checks may actually be harmful to minority hiring, because when you ban employers from conducting background checks, some react by surreptitiously not hiring black men, whom they suspect might have criminal records. As a Heritage Foundation scholar noted in the Washington Examiner, “Studies show that employers who check criminal backgrounds are more likely to hire African-American workers. Why? Background checks actually boost the hiring prospects of African-Americans with no criminal convictions. Deprived of that resource, employers are more likely to ‘hire defensively,’ declining to hire African-Americans because of the higher incidence of criminal convictions in that demographic group.” The EEOC’s attack on the use of criminal background checks is thus “likely to make it more difficult for racial and ethnic minorities to obtain employment.” Similarly, Peter “Kirsanow, an African-American lawyer” and member of the U.S. Commission on Civil Rights, has observed that the EEOC’s policy is thus “unlikely to increase employment among African American men” even though they are its “primary purported beneficiaries.”

Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law. Hans also writes for CNS News and has appeared on C-SPAN’s “Washington Journal.”

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